Canada bans foreign home buyers for two years • Hacker News Board

Re: Canada bans foreign home buyers for two years

#351

Post by jejeyyy77 » Tue, Apr 19, 2022, 2:32 PM UTC

OJFord wrote: post #323

jusssi wrote: post #167

Earlier quoted context omitted.

The question is, would an open auction be any better? The process will just happen at smaller increments. And you will have ghost bids to prop up the prices.

Yes it would be better, because you wouldn't pay your bid (for many it seems to just be max affordable) that was potentially the largest by a long shot. And I don't see that ghost bids propping it up would be much of a problem, they'd risk winning? You could require registering names, putting a deposit down perhaps, no real need for it to be anonymous even?

This seems intuitive, but it's wrong. As someone who went through the process, I think blind bidding suppresses prices, not inflate them.

When you are making a blind bid, the only information you have is the home itself. The ceiling for your bid is on what you think the house is "worth". You are very conscious about "overpaying" because you have no perspective on what other people are offering.

In open bidding, you are competing against other offers and the ceiling is basically what you can afford to pay.

Can't tell you how many times we lost offers because we didn't want to overpay - when the sold price was revealed we realized we would've paid another $25K on that had we known.

Re: Canada bans foreign home buyers for two years

#352

Post by 3qz » Tue, Apr 19, 2022, 2:34 PM UTC

symlinkk wrote: post #319

3qz wrote: post #111

The country is ruined for non owners and it will never get better. The only options left are moving to the prairies or living in a neo-feudal shithole. This is only being introduced so they can officially give up after pretending to fix anything. Quality of life has almost nothing to do with income anymore so it’s impossible to work for a better future. Being born 5 years later is the difference between tax free, 6 f…

This is well written and is something I noticed too during my own house hunt: houses owned by teachers, plumbers, and car mechanics were getting fought over by engineers, doctors, and lawyers.

A fun thought experiment is trying to imagine what career an 18 year old today should work towards if they want to own one of those homes. VC or Onlyfans? How can anyone plan for the future when prices might double between the start and end of a degree? They did for me…

I think the only option left is moving away. Everyone in tech is already doing it

Re: Canada bans foreign home buyers for two years

#353

Post by derefr » Tue, Apr 19, 2022, 2:35 PM UTC

NamTaf wrote: post #255

michaelje wrote: post #154

Earlier quoted context omitted.

>> Australia tried this with tragic results Australian living in Canada here - unsure what the tragic results were? It’s helped a number of my friends buy their first home - with a small (~$10k) credit /reduced stamp duties and taxes on the first home owned and lived in (ie not an investment). Negative gearing has been far more impactful in increasing the cost of housing, with people buying multiple homes for investm…

It’s largely understood (I am in a pub halfway across the world and have no specific citation) that the FHBG just bumped the purchase price up by that amount. In Australia, many new buyers’ max purchase prices are dictated by their total borrowing capacity (in that, few limit themselves to less), and many FHBs are competing against each other for a similar cross-section of the market, so grants are easily absorbed by…

I've always wondered whether higher-level "global top-down" market distortions (i.e. ones that use economic statistics as an input) would work here, where these sorts of naive "local bottom-up" manipulations fail.

For example, requiring that home sellers sell their homes with total consideration (incl. any required "side payments" to third parties) matching the mean market value of equivalent homes in other non-manipulated markets.

Or requiring that homeowners get their home appraised, and then legally mandate that consumers be charged a total compensation of at most the appraised value minus 10% to buy said home; with it being left up to the homeowner how to make that happen. (Where they can apply for their own government grants or whatever else, but they can't do anything that increases the total compensation demanded from the buyer—which would include taking any grants given to the buyer for buying a home.)

Re: Canada bans foreign home buyers for two years

#354

Post by Aunche » Tue, Apr 19, 2022, 2:36 PM UTC

tomrod wrote: post #322

Aunche wrote: post #309

Earlier quoted context omitted.

Why should I, a small time REIT holder, pay more proportionately in property taxes than a celebrity in a Beverly Hills mansion, or even my landlord who only rents out a few, million-dollar units for that matter? I think every individual should be entitled to 500k in preferential property tax (1 million for couples), and every dollar above that should be taxed a lot higher. In places where there is high demand, new ho…

> Why should I, a small time REIT holder pay more proportionately in property taxes than a celebrity in a Beverly Hills mansion, or even my landlord who only rents a few million-dollae units for that matter? To decrease the return on holding property indefinitely, which prevents renters from building equity to the benefit of small-time REIT holders. The outcome of this is an increase in home ownership which has a hos…

What's better for the housing market: someone who buys a $10 million home for themselves, or someone who buys 10, $1 million dollar apartments and rents them out? If anything, the former should be paying a higher property tax because they're constraining the supply buyer and renter markets.

>Basically, Georgism tax policy - https://en.wikipedia.org/wiki/Georgism.

Yes, I largely agree with Georgism, but I don't think incentivizing rich people to buy the largest home possible is within the spirit of Georgism. You'd also run into the problem of people pretending their apartment complex is really just a large mansion. They'd likely spend money on renovations that make the units less desirable to make it classify as a single home.

>What benefits do you see REITs provide to a community, beyond increasing your personal wealth?

What benefit does my landlord provide that a REIT doesn't? REITs allow me to be invested in real estate without exposing me to too much risk associated with a single location.

>Also, a hard cap of, say, 10 homes without increase would still allow REITs to exist depending on implementation.

No REIT can exist with 10 homes. That's way too much money proportionally spent on administrating it.

Re: Canada bans foreign home buyers for two years

#355

Post by randomdata » Tue, Apr 19, 2022, 2:37 PM UTC

bluGill wrote: post #142

3qz wrote: post #120

Earlier quoted context omitted.

The real estate agents operate as a cartel and wouldn’t accept offers this way.

Farms often are sold in live auction this way with the bidders announcing their bid. Each bidders knows their maximum, but none give that way, all they give away is they are willing to top the previous bid by someone else (even this is a trick - some bidders will pretend to be more/less interested than they really are trying to scare off other bidders) The auctioneer is typically a licensed real estate agent. The who…

As a farmer in Canada, I haven't seen a farm auction like that since I was a kid. Most farms these days are sold either by someone knocking on a door and making offer that can't be refused or by tender, conducted by law firms. Real estate agents/auctioneers, and the cut they want to take, have largely been taken out of the equation given how easy the farm properties are to sell.

Re: Canada bans foreign home buyers for two years

#356

Post by mensetmanusman » Tue, Apr 19, 2022, 2:38 PM UTC

pards wrote: post #98

I'm a homeowner in Toronto and I don't think this will help. They've eliminated a small number of buyers from the market but have added other incentives like a first home buyers tax credit that will only fuel the fire - Australia tried this with tragic results. >> working with provinces and territories to develop and implement a Home Buyers’ Bill of Rights and bring forward a national plan to end blind bidding. Blind…

Bidders out-bid themselves?!

That is messed up…

Re: Canada bans foreign home buyers for two years

#357

Post by BlargMcLarg » Tue, Apr 19, 2022, 2:39 PM UTC

randomdata wrote: post #340

bko wrote: post #217

Earlier quoted context omitted.

The question is why does something like blind bidding exist in real estate? It could exist in all sorts of places but doesn't. Imagine blind bidding when interviewing for a job. Write down the number you'd be willing to do the job for. Someone came in with a lower number, please resubmit. These weird market distortions in real estate have underlying causes. A lot of them are based off patchwork rules and regulations…

> Imagine blind bidding when interviewing for a job. Write down the number you'd be willing to do the job for. You've got that relationship backwards. The person doing the job is the seller. They are the ones taking bids. The employer – the buyer – is indeed blind. They don't know who else you are talking to and how much they are offering. If you can convince the employer that the other employer down the street has g…

>The employer – the buyer – is indeed blind.

I'd be very surprised if the average employer doesn't have far more information available to them than the average candidate. Especially given that's at least part of HR's role, knowing market salaries and deciding hiring budgets. They might not know about the hiring candidate directly, but more often than not, there are entire B2Bs dedicated to distributing this information. That's on top of skilled hiring managers and employers having vastly more experience with the whole procedure than the average candidate would.

Re: Canada bans foreign home buyers for two years

#358

Post by car_analogy » Tue, Apr 19, 2022, 2:40 PM UTC

eldaisfish wrote: post #345

car_analogy wrote: post #293

Earlier quoted context omitted.

> only about 2% of properties in Toronto and Vancouver are owned by overseas investors. Yes, housing is priced at the margin, but this won't do anything at all to prices over the long term. I'm sure this will be wildly popular politically, because people LOVE the idea that some foreign boogieman is the reason their children can't afford homes anymore. Overseas investors may own only 2%, but Canada has 23% foreign-bor…

this is textbook xenophobia and you should be ashamed. Implying that the foreign born population in Canada are somehow less canadian or more foreign is not what anyone should be saying.

Yes yes xenophobia - but is it true? Did Canada's past immigration policy contribute to current home prices? And more importantly - will the current immigration policy contribute to future high prices?

If the goal is affordable housing, why is immigration the one policy that must not be adjusted to meet that goal?

Re: Canada bans foreign home buyers for two years

#359

Post by OJFord » Tue, Apr 19, 2022, 2:43 PM UTC

jejeyyy77 wrote: post #351

OJFord wrote: post #323

Earlier quoted context omitted.

Yes it would be better, because you wouldn't pay your bid (for many it seems to just be max affordable) that was potentially the largest by a long shot. And I don't see that ghost bids propping it up would be much of a problem, they'd risk winning? You could require registering names, putting a deposit down perhaps, no real need for it to be anonymous even?

This seems intuitive, but it's wrong. As someone who went through the process, I think blind bidding suppresses prices, not inflate them. When you are making a blind bid, the only information you have is the home itself. The ceiling for your bid is on what you think the house is "worth". You are very conscious about "overpaying" because you have no perspective on what other people are offering. In open bidding, you a…

Well I suppose it depends on bidder mentality, sure, but in that case it's still better - you would have seen & bid the extra $25k and got it (maybe).

> In open bidding, you are competing against other offers and the ceiling is basically what you can afford to pay.

Well, what someone else can afford (and is willing) to pay. i.e. you never overpay, pretty much by definition.

(I think there probably exist 'open' auction system where the highest bid (not second) is paid, but the main ones don't work like that, and nobody's suggesting that as far as I've seen.)

Re: Canada bans foreign home buyers for two years

#360

Post by kogepathic » Tue, Apr 19, 2022, 2:43 PM UTC

franciscop wrote: post #175

rch wrote: post #72

Earlier quoted context omitted.

Why not progressively increment after the second? (not mutually exclusive with other measures)

I've been thinking a lot about this, and I think to promote everyone's owning a house, and even small-size investments, but to avoid megacorps the ideal would be something like: 1 house - tax breaks 2 houses - same taxes as currently for 2 houses 3+ houses - incrementally more expensive with each extra house Also there's a really nice law in Spain, born for the wrong reasons, that makes you pay more taxes if the hous…

> 1 house - tax breaks

Why should society be subsidizing home ownership more than they already do?

The real estate market already discriminates against people who cannot afford a deposit (an increasing proportion of people, since house prices are increasing so rapidly), and the design of North American cities encourages urban spawl which is unsustainable with current property tax rates. [1]

> and I think to promote everyone's owning a house

Why? Half of German households rent [2] and no one is wringing their hands about how people should be owning their home instead of renting.

As someone who has lived in Europe and North America, there seems to be a borderline obsession with owning a house in anglophone countries, and I don't understand why. If the rental market is sane (e.g. rent is approximately equivalent to a mortgage) then it's up to the individual if they want to purchase a home (e.g. to renovate how they see fit) or is comfortable just renting.

[1] https://www.youtube.com/watch?v=7Nw6qyyrTeI

[2] https://www.weforum.org/agenda/2021/04/global-percentage-ren...